Nevada County Picayune and Gurdon Times Newspaper Archive

Potlatch Reports Lower 3rd Quarter Earnings

Potlatch Corporation reported lower earnings for the third quarter of 1996, largely due to lower net sales realizations for the company's paperboard and panel products, according to a Potlatch news release.

A change in the company's tax rate, due to recent legislation and a settlement of certain state tax issues, favorably affected results for the quarter.

Net earnings for the third quarter were $19.5 million, down from $31.7 million for 1995's third quarter. Earnings per common share were $.68, compared with $1.09 per common share in the third quarter of 1995. Net sales were $398.2 million for the quarter, compared with 1995's $411.2 million.

Net earnings for the first nine months of 1996 were $42.6 million, or $1.48 per common share, before an extraordinary charge for early extinguishment of debt of $2.9 million or $.10 per common share. Including the extraordinary charge, earnings were $39.7 million, or $1.38 per common share. Net earnings for the first nine months of 1995 were $79.2 million, or $2.71 per common share. Net sales for the first nine months of 1996 were $1.17 billion, versus $1.20 billion in 1995.

The Wood Products Group reported operating income of $18.5 million earned in 1995's third quarter. "Lower net sales realiazations for the company's panel products were largely responsighble for the decline," said John M. Richards, Potlatch chaiarman and chief executive officer.

"Also, plywood shipments during the quarter were adversely affected by any downtime taken at the two Idaho mills to facilitate the shift to industrial grade products."

Operating income for the Minnesota Pulp and Paper division was $14.5 million for the quarter, up from $13.5 million in the third quarter of 1995.

"Shipments were higher for the division's coated papers, reflecting good strength in highline grades for this time of the year," Richards said.

The divison's two coated paper facilities operated well during the quarter, leading to increased production which positively affected earnings. A decline in average realizations of seven percent offset most of these benefits.

The other pulp-based businesses, which include the Pulp and Paperboard Group and the Consumer Products Division, reported third quarter 1996 operating income of $10.9 million, compared with $23.1 million a year ago.

The decline was primarily due to lower net sales realizations for paperboard, compared to the third quarter of 1995. "However, on the positive side, results for the Consumer Products Division continue to improve," Richards said.

"Near the end of the quarter we started up the first of the replacement washers in the Lewiston pulp mill. With additional washers scheduled to start up during the fourth quarter, we expect the substantial operating problems caused by the washers to be largely behind us by year end," Richards said.

"Market conditions for many of our products remain unsettled," Richards added.